Generating Value in Alliance Contracts Through the Lean Concept

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Abstract

The construction industry has recognised alliancing as a means to increase construction efficiency. Despite the potential benefits attributed to alliancing, the true performance enhancements have not been fully gained in existing alliances. The main focus of the alliance framework is on contractual and organisational domains but less on the operational domain. Even though the operational domain is vital, there has been little research conducted to investigate the integration of operational systems into alliances. Therefore, the current research investigates existing operational practices within projects executed using alliance procurement methodology. It goes on to determine the potential application of lean concepts to improve operations on alliance projects.

A number of research questions are posed with a view to increasing the available knowledge about the interferences in alliance projects and ways of applying Lean in an alliance. Due to the contemporary nature of the research problem, a case study research approach was adopted. The selected case study was a viaduct replacement project in Auckland, New Zealand. This study used participant observations, document reviews, interviews and questionnaires as data collection methods. The participant observation covered five processes in an alliance project to identify process waste.

Initial process studies were conducted at the southbound construction phase of the viaduct. After completion of each process study, the process study findings were validated through process study reports and presentations at follow-up meetings. The participants of the follow-up meetings were the construction manager, project engineers, site engineers and supervisors. After initial process studies, separate study visits were conducted to study the improvements achieved, the problems faced during implementation and the reasons for precluded improvements. In order to identify behavioural waste in an alliance project, interviews and a questionnaire survey were conducted. Consequently, depending on the data forms, quantitative or qualitative data analysis was performed. The empirical data were analysed by iterating between observed evidence and the literature, also using experts’ comments and suggestions.

The study confirms that the construction work in an alliance project can be improved considerably by eliminating waste factors. Moreover, the study showed that the savings are substantial as the processes studied were cyclic and repetitive. This study yields a methodology for process waste detection and improvements at site level. It is evident from the process study observations that the non-integration of site workers and sub-contractors within an alliance can create process waste. The study proposes best practices to eliminate that behavioural waste in alliances by using lean principles.

Even though previous researchers stated that there are resistances to lean implementations and process changes in construction, alliance project members were interested in making changes and willing to extend their joint effort. The percentages of process waste in the current study are consistent with recent productivity studies conducted under different procurement methods. Therefore, the study confirms that there is no significant difference in the volume of process waste for the various procurement models. In conclusion, it is not sufficient to change only contractual and organisational practices to achieve a game breaking level of performance with alliances, but it requires a robust operating system for an optimised delivery of a project.

This research contributes to existing knowledge in the area of Lean and alliances. In particular, the study makes contributions to the lean theory applied to construction and provides advice to professional practice.